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Re Plutus Payroll Australia Pty Ltd

Re Plutus Payroll Australia Pty Ltd

Case [2017] NSWSC 1854 14 December 2017

Winding Up & Liquidation

Offsetting Claim

Statutory Demand

Corporate Law & Governance

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: In the matter of Plutus Payroll Australia Pty Limited [2017] NSWSC 1854
Hearing dates: 12, 13 December 2017
Date of orders: 14 December 2017
Decision date: 14 December 2017
Jurisdiction: Equity - Corporations List
Before: Brereton J
Decision:
.Statutory demand varied; proceedings stayed pending related criminal committal proceedings, and provisional liquidators appointed.

Catchwords:
CORPORATIONS — Winding up – Statutory demand – offsetting claim – where funds frozen by proceeds of crime order – held, not a sufficient other reason under s459J(1)(b) – where there is an arguable and genuine offsetting claim under s 8AAZL of the (CTH) Taxation Administration Act 1953 – held, claim may be offset pursuant to (CTH) Corporations Act s 459H(4)

CORPORATIONS — Winding up – Appointment of provisional liquidator – where prima facie case of insolvency and concern assets may be at risk –related proceeds of crime proceedings – held, it is fair and just to balance the competing interests to appoint a provisional liquidator be appointed with conditions.
CORPORATIONS — Winding up –Application for stay – whether proceeding should be otherwise stayed until the conclusion of the pending committal proceedings – held proceedings should be stayed.
Legislation Cited: (CTH) Corporations Act 2001 s 459H, s 459J
(CTH) Criminal Code 1995 s 135.4(3)
(CTH) Income Tax Assessment Act 1936
(CTH) Proceeds of Crime Act 2002
(CTH) Taxation Administration Act 1953
(NSW) Building and Construction Industry Security of Payments Act 1999
(NSW) Evidence Act 1995 s 128
Cases Cited: Cameron's Unit Services Pty Ltd v Kevin R Whelpton & Associates Pty Ltd (1984) 4 FCR 428
Ceasar v Sommner [1980] 2 NSWLR 929
Clyne v The Commissioner of Taxation (1981) 150 CLR 1
Commissioner of Australian Federal Police v W [2016] NSWSC 683
Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46; [2015] HCA 5
Deputy Commissioner of Taxation v Broadbeach Properties (2008) 237 CLR 473
Douglas Aerospace Pty Limited, In the matter of [2015] NSWSC 167
Golden City Car & Truck Centre Pty Ltd v Deputy Commissioner of Taxation [1999] FCA 922; (1999) 42 ATR 379
Plutus Payroll Pty Limited, In the Matter of [2017] NSWSC 1360
Jefferson Ltd v Bhetcha [1979] 1 WLR 898
Lee v The Queen (2014) 253 CLR 458; [2014] HCA 20
McMahon v Gould (1982) 7 ACLR 202
Ransley v Commissioner of Taxation [2016] FCA 778
Seller v Commissioner of Taxation [2013] FCA 1373; (2013) 308 ALR 376
Smith v Selwyn [1914] 3 KB 98
X7 v Australian Crime Commission (2013) 248 CLR 92; [2013] HCA 29
Category: Principal judgment
Parties: Deputy Commissioner of Taxation (Plaintiff/Respondent)
Synep Pty Ltd (ACN 611 299 328) (Eleventh Defendant/Applicant)
Representation:
Counsel:
J M White with K Petch (Plaintiff/Respondent)
R Seiden SC with A Gerard (Eleventh Defendant/Applicant)
Solicitors:
Australian Government Solicitor (Plaintiff/Respondent)
O’Loughlin Westhoff Lawyers (Eleventh Defendant/Applicant)

File Number(s): 2017/ 169447

Judgment (EX TEMPORE)

14 December 2017

The substantive proceedings before the Court relevantly comprise the application of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Plutus Payroll Australia Pty Ltd

Details

AGLC: In the matter of Plutus Payroll Australia Pty Limited [2017] NSWSC 1854
Case: [2017] NSWSC 1854
Decision Date: 14 December 2017

CaseChat Overview and Summary

Plutus Payroll Australia Pty Ltd was the subject of a winding up application by the Australian Taxation Office (ATO) which was heard in the Federal Circuit Court of Australia. The ATO sought a winding up order on the basis of an unpaid tax debt. Plutus argued that the debt was offset by a claim under the Taxation Administration Act 1953, and that the freezing of funds by a proceeds of crime order should preclude the winding up order. The court had to decide whether the offsetting claim was sufficient to prevent the winding up, and if so, whether it was appropriate to appoint a provisional liquidator with conditions.

The court considered the provisions of the Corporations Act, particularly sections 459J(1)(b) and 459H(4), in relation to the offsetting claim. The court found that while the proceeds of crime order did not constitute a sufficient other reason to prevent the winding up, the existence of an arguable and genuine offsetting claim did allow for the debt to be offset. Consequently, the court held that the claim could be offset under the Act, which impacted the ATO's ability to proceed with the winding up application. The court also determined that given the competing interests, including the potential for asset dissipation and the related proceeds of crime proceedings, it was fair and just to appoint a provisional liquidator with specific conditions.

In its reasoning, the court balanced the need to protect the ATO's claim with the potential for asset dissipation and the ongoing criminal proceedings. The court found that the appointment of a provisional liquidator with conditions was the most appropriate course of action to safeguard the company's assets while allowing the offsetting claim to be considered. Additionally, the court decided that the winding up proceedings should be stayed until the conclusion of the related committal proceedings to prevent any prejudice to the criminal case.

The court's final orders included the appointment of a provisional liquidator with specified conditions, and a stay of the winding up proceedings pending the outcome of the committal proceedings. This decision highlights the importance of considering the broader legal context and competing interests in winding up applications, particularly where tax debts and criminal proceedings are involved.

Orders